Group life insurance cost: what death in service costs an employer
Group life insurance cost depends on who is covered and for how much.
We found no group life rates published by an insurer, so this page shows the only per-employee examples we could source, a broker's (Drewberry (broker) ↗), explains what moves the price and sets out the death in service cost to the employer.
Every claim here is our summary of a named external source, linked beside it. Sources change: check the wording at the link before you rely on it.
What drives group life insurance cost?
Drewberry, a broker, lists the factors: employees' ages, staff salaries and job roles, the industry, and the number of staff (Drewberry (broker) ↗).
Salary works through one number, the sum insured: each employee's salary times the scheme's multiple.
Legal & General says most UK employers offer between two and four times salary (Legal & General ↗).
Put in your own headcount and average salary to see the total an insurer would be asked to cover.
It is not a price: it is the figure a price is built on.
Cover as a multiple of salary
Which page do you need?
This page answers what group life and death in service cost.
What the scheme is and who can have one are on the group life insurance page; setting a scheme up and getting quotes are on death in service insurance.
If you are an employee asking what your family would receive, the death in service guides are below.
- For employees
Death in service
What it means, whether you still need life insurance, how the payment is made and whether it is taxed.
- The rules
Death in service benefit
How much it pays, who gets it, the NHS scheme, benefit in kind and the pension link.
- For families
Death in service payments
How a claim is made, what it needs and who decides who is paid.
- Calculator
Death in service calculator
Your salary times your scheme’s multiple, with the tax checks.
- For employers
Death in service insurance
Buying a scheme for your staff: setting it up, quotes, what to compare and providers.
- For employers
Group life insurance
The group life assurance scheme: minimum employees, registered or excepted, small firms.
How much does group life insurance cost? A broker's examples
Drewberry publishes two examples based on the cheapest quotes for two recent clients: a 10-employee software company in London with cover at four times salary, and a 100-employee health services company in Barnsley at two times salary, both with cover ending at state retirement age (Drewberry (broker) ↗).
It gives £31.97 per employee per month for the first and £10.03 for the second, says the quotes were accurate as of November 2025, and that they are for illustration purposes only (Drewberry (broker) ↗).
These are a broker's words and figures, not an insurer's rates and not ours.
Your workforce will differ.
Death in service cost to employer
The cost to the employer is the premium for the group life policy behind the benefit, priced on the workforce as the drivers above show (Drewberry (broker) ↗).
The table shows how the tax rules shape what that premium costs the business.
Aviva says its premiums are usually treated as an allowable business expense (Aviva ↗), and HMRC's 2018 reform allowed the beneficiary of employer-paid life cover to be any individual or registered charity without the premiums being treated as a taxable benefit in kind (HMRC ↗).
There is no death in service cost to employer calculator here that gives a premium: we found no insurer-published rates to build one on.
For your own tax figures, ask an accountant; for a price, ask an adviser or broker for a quote.
The rule as each source states it, not a calculation. Check your own position with HMRC guidance on GOV.UK or an accountant.
How to reduce group life insurance costs
The price follows what is insured, so the levers are in the scheme design.
Canada Life offers cover as fixed amounts or multiples of salary (Canada Life ↗).
Aviva lets the employer choose when cover ends: state pension age or a fixed age up to 75 (Aviva ↗).
Aviva also covers most employees up to a set level without seeing their medical information (Aviva ↗).
For one or two senior people, relevant life cover is a separate, single life policy the employer takes out and pays for (Royal London ↗).
We do not give quotes or advice.
An FCA-authorised adviser can compare designs and insurers for you.
Level
Choose the cover level
A fixed amount, or a multiple of salary. The sum insured scales with it.
Term
Choose when cover ends
State pension age, or a fixed age up to 75.
Groups
Decide who is in which category
Aviva lets employers set different benefit levels for different groups.
Compare
Ask for more than one design
Quotes on each design show what each lever is worth for your workforce.
Cover options (Canada Life ↗); cease age (Aviva ↗); categories and free cover (Aviva ↗). Each describes that insurer's own product.
Check it for yourself
Every claim on this page is our summary of one of the documents listed here.
We last checked them against the live sources on 28 September 2026.
The documents are the authority, not this page.
Insurers and HMRC update them, so validate any figure or condition at its link before you rely on it.
- Drewberry (broker, tier 2): death in service insurance ↗A broker’s two published cost examples (November 2025) and the cost drivers it lists
- GRiD: group life assurance ↗The industry body’s description, tax summary and 2023 market figures
- Canada Life: Group Life Insurance ↗Minimum scheme size, registered or excepted trusts, and the tax position it describes
- Aviva: Group Life registered and excepted benefits technical guide (GR01299) ↗How Aviva’s registered and excepted group life policies differ: tax, trusts, cease ages
- Aviva adviser: Group Life ↗Scheme sizes on Aviva’s online platform and its free cover limit
- Legal & General: relevant life and excepted group life policies ↗What an excepted group life policy is, the allowance and discretionary trust charges
- HMRC Pensions Tax Manual, PTM172000 ↗The lump sum and death benefit allowance, and the marginal-rate charge on the excess
- HMRC: reform of employer contributions into life assurance (2018) ↗Employer-paid life cover premiums not a taxable benefit in kind for individual or charity beneficiaries
- Royal London relevant life FAQs ↗Relevant life: single life cover the employer pays for
- Legal & General: death in service v life insurance ↗Most UK employers offer two to four times salary
Group life insurance cost, answered
Not financial advice. This page is general information. Before buying insurance, the FCA tells consumers to check the firm on its Firm Checker (FCA ↗). For free guidance, see MoneyHelper.